Bega triumphs over Kraft in yellow lid legal battle

Kraft went to the Federal Court alleging Bega engaged in misleading or deceptive conduct over the marketing of its peanut butter.

After the sale of Mondelez to Bega, the Australian dairy brand ran ads claiming “Kraft peanut butter is now Bega peanut butter” and that it was “Never oily, never dry, with the same taste you’ve always loved, and is now Aussie owned by Bega”.

Bega is “exclusively entitled” to use the yellow lid and red and blue peanut label.

Bega took over the former Victorian Kraft factory in Port Melbourne as part of the sale.

Federal Court Justice David O’Callaghan on Wednesday delivered his judgment declaring that while the goodwill generated by the trademark branding had rightly benefited Kraft, and later Kraft and Mondelez, those rights had been transferred to Bega as part of the sales agreement between it and Mondelez.

As a result, Bega is now “exclusively entitled” to use the yellow lid and red and blue peanut label.

Justice O’Callaghan found Bega had breached consumer law with respect to its first advertisement, but Kraft also breached the law in an October 2017 press release when they described their product as “loved since 1935”.

Kraft last year tried to get US courts to stop Bega using the branding, seeking “emergency relief” against Bega from the International Centre for Dispute Resolution while also launching its own action in the US federal court.

Justice O’Callaghan told Kraft proceedings there could not continue until the Australian case was handled.

The matter’s not over yet, with a further hearing to be held to determine relief, which could include damages.